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 Chapter 05: Taxation of Compensation under the Railroad Unemployment Insurance Act
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          Labor Employer Reporting Instructions (LERI)
          Part III - Principles of Service and Compensation
          Chapter 05: Taxation of Compensation under the Railroad Unemployment Insurance Act
 Topics
    

      
              Part I - Prerequisite Knowledge for Labor Employer Reporting
          Part II - Establishment of Employee Records
          Part III - Principles of Service and Compensation
                                Chapter 01: Service Months
          Chapter 02: Employment Relation
          Chapter 03: Creditable Maximum Compensation Amounts
          Chapter 04: Taxable Compensation under the Railroad Retirement Tax Act (RRTA)
          Chapter 05: Taxation of Compensation under the Railroad Unemployment Insurance Act
          Part IV - Particular Types of Compensation Payments
          Part V - Reports of Creditable Service and Compensation
          Part VI - Reports Related to Service and Compensation
          Part VII - Additional Communications about Service and Compensation Reports
          Part VIII - Employer Reporting System (ERS) Internet User Instructions
          Appendices Chapter 05: Taxation of Compensation under the Railroad Unemployment Insurance Act
							 
							
							
            pdf iconLERI-Part III_CH 5 (32.01 KB)
      
            **RUIA Tax Withholding Introduction**

Unlike compensation under the RRA and the RRTA, the monthly maximum taxable and creditable compensation amount under the RUIA for an employee may be allocated among multiple concurrent employers.

**RUIA Tax Withholding from Multiple Employers**

If an employee works only for a system unit in a month, earnings are creditable and taxable under the RUIA up to the monthly maximum. If the employee also worked for another covered employer in the same month, the employee's combined earnings are creditable up to the RUIA monthly maximum.

If the combined earnings exceed the RUIA monthly maximum, the creditable RUIA compensation may be allocated or prorated between the two employers. The method of prorating is not set by the Railroad Retirement Board, but by agreement between the two employers. Any method that yields the correct total RUIA compensation and produces payment of the RUIA contribution liability is acceptable to the RRB.

Part IV, Chapter 2 and the Form OE-1 instructions includes more detailed information about alternative ways, including examples, to apportion RUIA earnings between multiple employers.

**Labor Organizations and RUIA Reports/Tax**

If a labor organization does not report or tax RUIA compensation because of primary carrier earnings, proper documentation must exist in the system subordinate unit's records to substantiate non-reporting of RUIA earnings. Because the RUIA maximum earnings are monthly, substantiation must exist for each month of non-reporting and the corresponding non-payment of RUIA contributions is assumed. Substantiation is needed to prevent the underpayment of RUIA tax and possible resultant penalties and interest.
        ‹ Chapter 04: Taxable Compensation under the Railroad Retirement Tax Act (RRTA) | 
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 Last updated: 06/16/2017